Japanese two-wheeler maker Yamaha Motor Co Ltd is looking at scaling up research and development (R&D) operations in India, with an aim to designing the country’s cheapest motorcycle indigenously and shoring up volumes in the fast-growing domestic market.

“Until this year, basic development of products was being done by Yamaha at our headquarters in Japan. We have an R&D centre to make minor changes on models in India. In future, our R&D team should be independent and capable of developing a new motorcycle in the commuter segment,” said Hiroyuki Suzuki, chief executive officer and managing director of India Yamaha Motor.

The company is working out the investment required for stepping up R&D activities in the country.

Yamaha’s new low-cost bike is expected to be priced at around $500 (Rs 27,500), cheaper than the entry-level motorcycle ‘Crux’, tagged at Rs 38,365.

Yamaha, at present, has marginal share in the low-cost commuter segment with the ‘YBR110’ and ‘Crux’, which together sells 5000-odd units every month.

The move to develop a low-cost motorcycle comes close on the heels of compatriot Honda Motor Co Ltd (HMC) launching its cheapest motorcycle, the 110 cc ‘Dream Yuga’, in India.

Priced at Rs 44,642 (ex-showroom, Delhi), the bike is expected to shore up Honda’s market share in the seven-million strong commuter segment in the country.

“We will have production volume of two million units in 2016. Scooters will contribute 30 per cent to our overall sales, the 150 cc models will account for 40 per cent and the remaining numbers will come in from entry-level motorcycles,” Suzuki said. Overall, the company is eyeing a 10 per cent share in the Indian two-wheeler market by 2016.

Yamaha recently announced plans to invest around Rs 1,500 crore to set up a new plant in Tamil Nadu and enhance capacity across its existing units. The new low-cost bike will be manufactured at Chennai and exported to markets in Africa.